Lockheed Martin Ramps Up Munitions Production Amid War, Spending Skyrockets -- Update

Published: 2026-04-23 11:29:33 ET LMT

Published on 04/23/2026 at 11:29 am EDT

By Connor Hart

Lockheed Martin is working to rapidly expand munitions production in the face of surging demand, as the U.S. responds to ongoing conflicts and heightened geopolitical tensions.

Those investments in production--coupled with the timing of some billings, long-term debt repayments and cash dividends--caused the defense contractor to burn through more money than expected in the latest quarter. Lower-than-anticipated earnings sent shares down.

The stock fell 4%, to $533.60, on Thursday. Despite the loss, shares are up 7.4% since the beginning of the year.

Lockheed has construction and modernization projects currently in the works at more than 20 of its facilities nationwide, Chief Executive Jim Taiclet said on a call with analysts. The investments will allow the company to increase the scale and speed at which it delivers munitions by improving production infrastructure and capabilities as well as strengthening supply chains.

The deals Lockheed inked with the Pentagon during the recent quarter are supporting the investments, and the company will continue to collaborate with the U.S. government to help meet current weapons needs, Taiclet said.

Lockheed earlier this month secured a $4.7 billion contract from the U.S. government to accelerate production of Patriot interceptors, which have been used extensively by the U.S. and its allies to shoot down Iranian missiles and drones. The contract marks a step toward the Lockheed's goal of more than tripling production of the PAC-3 MSE interceptor by 2030.

Beyond production investments, Lockheed said the timing of some billings, some $1 billion spent on long-term debt repayments and $816 million on cash dividends weighed on cash flow during the latest quarter.

The company reported $291 million of negative free cash flow in the recent first quarter. It still predicts a positive year, calling for free cash flow between $6.5 billion and $6.8 billion in 2026. Lockheed additionally backed its full-year outlook for earnings of $29.35 to $30.25 a share on revenue of $77.5 billion to $80 billion.

For the quarter ended March 29, the company posted a profit of $1.49 billion, compared with $1.71 billion in last year's comparable period. Quarterly earnings of $6.44 a share were below the $6.74 a share that analysts polled by FactSet expected.

Sales ticked up 0.3% to $18.02 billion, missing Wall Street models for $18.22 billion. Growth across both Lockheed's missiles and space businesses was slightly offset by its aeronautics unit, which saw lower volumes. Chief Financial Officer Evan Scott noted that sales were hurt by the shortened fiscal period compared with the prior year.

Separately, Lockheed said Thursday that Peru will buy 12 new F-16 Block 70 aircraft, modernizing its fighter fleet and strengthening its national defense capabilities.

Write to Connor Hart at [email protected]

(END) Dow Jones Newswires

04-23-26 1128ET